A big topic of conversation for many is whether or not buying a home in Sioux Falls is better than renting a home. While there are certainly benefits to renting (and at times it is the better option), more often than not, buying a home is much more financially wise than long-term renting for a handful of reasons.
Tax Benefits
Owning a home comes with certain tax benefits like a mortgage interest deduction. For home loans up to $750,000, you can receive a deduction on the interest you pay on your home. Additionally, you can deduct your property taxes up to $10,000. Unlike home ownership, renters do not qualify for certain tax breaks.
Build Equity
A downside to Sioux Falls home rentals is that you do not reap the benefits of a monthly payment. Essentially, once you pay your rent, you will not see that money again. While this can makes sense if you are only planning on living somewhere for a year, it declines in benefits the longer you live in a rental home.
However, with home ownership, paying a mortgage is not only a payment or expense, it is an investment. Putting money towards certain improvements in the home, for example, is not a waste as those improvements increase the overall value of your home. Further, if property values increase overall in your neighborhood and you are looking to sell, you could end up walking away with more money than the original amount that you paid for the home; whereas, if you are renting a home and property values increase, your landlord has an incentive to increase your monthly rent because the neighborhood is more desirable to renters.
More Stability
While there are landlord-tenant laws in place, there are no laws stopping landlords from kicking their tenants out of their homes once leases expire. If you are planning on living in a location for an extended period of time, this lack of stability can become a source of stress. The longer you live in a rental home, the more it feels like your home. This can create a lot of emotional and mental stress during your annual lease renewal.
This particular source of stress is often magnified if you have children. If you would like to keep them in the same school district, for example, the need for stability increases. Additionally, owning a home removes various rules set in place by landlords. For example, if you bring two dogs into your home, but your landlord only allows one, you risk being kicked out of the house before your lease expires due to breaking your agreement. If you own your home, you get to do as you please.
While owning a home does have disadvantages like having to pay out of pocket for maintenance and repairs, the advantages far outweigh the disadvantages. If you have found a neighborhood in Sioux Falls that you plan to live in for years, it is worth the investment to buy instead of rent.
